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| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Secure Income Reit Plc | LSE:SIR | London | Ordinary Share | GB00BLMQ9L68 | ORD 10P |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 461.00 | 461.00 | 461.50 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
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Sirius Financial Solutions PLC
10 April 2002
SIRIUS FINANCIAL SOLUTIONS PLC
2001 PRELIMINARY RESULTS
SIRIUS PRODUCTS ACHIEVES SUCCESS IN CHALLENGING YEAR
Sirius Financial Solutions, the specialist supplier of software and services to
the insurance and financial services industry worldwide, today announces its
preliminary results for the year ended 31 December 2001.
HIGHLIGHTS
• Increase in Group turnover to £17.37m (2000 : 17.14m)
• Starting 2002 with record order book of £7.5m (2001 : £2.0m)
• Recurring revenues remained strong at 34.9% of turnover, £6.1m
• Operating profit before goodwill amortisation of £0.66m (2000 : £1.71m)
• Sustained operating cash inflows of £0.55m (2000 : £1.71m)
• Installations of Sirius for Broking packages now exceed 100 with sales of
higher-value Sirius for Underwriting solutions reaching 14
• More than 4,000 Sirius licences were committed to or deployed in 2001
Stephen Verrall, Chief Executive of Sirius Financial Solutions, said:
"In 2001 we lived through an extraordinary year. More than ever before, we have
enjoyed access to global opportunities but have also been adversely affected by
global stresses.
We believed last year that we had, in Sirius, a product that was well matched to
market needs. This belief has been confirmed. We are seeing healthy sales of
Sirius with strong signals of more to come. We are acquiring the reputation for
having a compelling proposition and that is drawing organisations to us.
During 2001, we took sales orders which, when fully deployed, will represent
more than 4,000 'seats' of the Underwriting and the Broking product.
In 2002, we have our strongest order book ever and are forecasting high growth.
At this point in the year, we have committed professional services revenue which
is twice last year's total. We already have visibility of two-thirds of our 2002
target revenue. In line with many other companies in the IT Sector we have
reviewed our revenue recognition policy. This will result in much of the
significant business which we secured at the very end of 2001 being attributed
to 2002 revenue. We anticipate this making 2002 an exceptional year."
SIRIUS FINANCIAL SOLUTIONS PLC
2001 PRELIMINARY RESULTS
CHAIRMAN'S STATEMENT
REVIEW OF RESULTS
2001 was without doubt a difficult year for the software sector. For the Group,
it was an exciting but challenging year as it started to see the realisation of
its ambition to become a global technology supplier.
Performance in the first half of the year was adversely affected by the extent
of the Group's investment in its US operation and was more generally affected by
economic conditions in the UK and worldwide. Economic conditions were a factor
in the deferral of business decisions, and this situation was exacerbated by the
impact within the insurance market of the events of September 11th.
However, market factors notwithstanding, the strength of the Sirius products won
through in 2001. The Group saw pleasing growth in business at the end of the
year and continuing acceptance for its contemporary, component-based software in
both the underwriting and intermediary sectors. An increase in licence sales of
£1.1m over the previous period was achieved. Although this does not represent
the overall level of billing that the Group had hoped for, it demonstrates its
ability to grow in a difficult market.
During the year, the Group reacted prudently to market conditions by containing
costs and controlling borrowings, thereby maintaining low gearing. Management
acted decisively in postponing acquisitions, thus avoiding the distraction and
expensive professional fees. Its focus during the year was firmly upon
productivity and upon achieving high-margin licence sales.
In 2001, turnover grew to £17.37m (2000 : £17.14m), with operating profits
before goodwill amortisation of £0.66m (2000 : £1.62m) and an operating profit
margin before goodwill amortisation of 3.8% (2000 : 9.5%). Recurring revenues of
£6.1m remain strong at 34.9% of turnover (2000 : £6.1m and 35.8%) and the Group
continued to generate operating cash inflows of £0.55m (2000 : £1.71m). Group
gearing remained low at 28.9% (2000 : 26.1%), and the cash and debt position of
the Group has improved subsequent to the year end.
PRODUCT
At the end of the year, a number of orders of Sirius for Underwriting solutions
were taken which will be deployed in 2002. The Group's underwriting user base
now numbers 14 organisations.
The Group was particularly pleased to close the year by securing a very
significant order for delivery in 2002. Commitment was gained from NRMA
Insurance NZ Ltd., New Zealand's largest general insurer, to a 1,200-user Sirius
for Underwriting deployment. The Board believes that this ranks amongst the most
important decisions to purchase underwriting software made in the market last
year and positions the Group well to market its product more assertively on a
global basis.
In its packaged offering of Sirius for Broking to UK intermediaries, 60 new
sales were made in 2001, a high proportion of which were displacements of
competitor systems. Broker reaction confirms that the Group has a clear market
lead over the competition.
Whilst the sector has been somewhat distracted by the new players offering an
outsourced bureau operation, Sirius for Broking provides a depth of
functionality and evidence of new technology working successfully.
In 2001 alone, total new orders were delivered or taken which once deployed will
represent more than 4,000 committed licences of Sirius for Underwriting and
Sirius for Broking. This compares well with 2000, the year of Sirius' new
product launch when 1,000 licences were sold.
It is noteworthy that the year-end was also a very good period for sales of the
Swift product for the IFA market.
PROSPECTS
As announced in February, the Group has made an excellent start to the current
year, which resulted in a record order book at that time.
This order book included licence sales of £3.0m and man-time revenues of £4.5m,
all of which are scheduled for delivery during 2002. The comparable total figure
last year was £2.0m.
This order book, combined with recurring revenues, gives the Group visibility of
£14.5m of revenues for 2002 which represents approximately two-thirds of the
market consensus forecast revenues for the year. In recognition of this and as
an expression of its confidence, the Board proposes that the dividend will be
maintained at the level declared in 2000.
In February we also announced the deferral of a sizeable contract from 2001 into
2002. As a consequence, we anticipate reporting higher than normal H1 revenues
and profits in the current year.
The Group is more confident than ever in the strength of its proposition for
both the underwriting and broking markets. Assuming that the early indications
of improving confidence in the insurance market place continue, we anticipate
2002 will be the year in which Sirius reaps the rewards of investment.
PARTNERSHIPS
In early 2001, the Group was particularly pleased to become the first Microsoft
Partner developing applications for the insurance marketplace to achieve Gold
Certified Partner Status in the UK.
During the year, it also formed a partnership with IT services group, CMG UK
Limited, in order to capture a greater share of the UK and European insurance
markets. Joint bids are being actively worked upon.
In 2002, the Group anticipates partnerships becoming an even more important part
of the sales mix as it seeks to scale its business to take advantage of larger
opportunities for its underwriting software.
EMPLOYEES
The Group continues to benefit from a well-skilled employee base. Whilst many of
Sirius' competitors are downsizing or retrenching at this time, the Group has
embarked upon a recruitment drive for additional technical and sales-related
roles.
I should like to personally thank all members of staff for their loyalty,
commitment and contribution during 2001 and to wish them every success in 2002.
Ian Yeoman
Chairman
9 April 2002
GROUP CHIEF EXECUTIVE'S STATEMENT
REVIEW OF 2001
We have just lived through an extraordinary year. More than ever before, we have
enjoyed access to global opportunities but have also been adversely affected by
global stresses. Not only have we seen and been affected by the deepening of
difficulties for IT companies globally, but we have witnessed at first hand the
negative impact of the events of September 11th upon the industry that we serve.
Specifically in the UK insurance market, we have seen our broker and IFA
customers shoulder the burden of increased regulation. For many of them,
restructuring their business in the wake of the collapse of Independent
Insurance Company was an additional challenge.
At Sirius, we believe that we have seen the worst of the economic downturn. The
experience we have gained over an 18-year history, not least in surviving the
vagaries of economic conditions, has served us well. With our core assets of
skills, knowledge and experience now complemented by a new, strong product
offering, we have weathered the storm of 2001 and have achieved a year of great
progress for the Group.
We can record that all of our three key products, Sirius for Underwriting,
Sirius for Broking and Swift for IFAs, have done exceptionally well. Despite
market difficulties, we saw a strong sales performance in all three areas.
We believed last year that we had, in Sirius, a product that was well matched to
market needs. This belief has been confirmed. We are seeing healthy sales of
Sirius with strong signals of more to come. We are acquiring the reputation for
having a compelling proposition and that is drawing organisations to us.
During 2001, we took sales orders which, when fully deployed, will represent
more than 4,000 'seats' of the Underwriting and the Broking product.
SIRIUS FOR UNDERWRITING
Sirius for Underwriting has seen a remarkable year. We closed 2001 having made
our 14th sale. Sales were global and included underwriters in the Americas,
Africa, New Zealand and the UK.
Securing one of the most important underwriting software orders of the year, a
1,200-user system for NRMA Insurance NZ Ltd in New Zealand, is an excellent
endorsement for Sirius. NRMA reviewed a wide range of insurance software
suppliers worldwide then selected Sirius for Underwriting ahead of all other
suppliers.
In 2002, we are already on the shortlist for a number of sizeable underwriting
contracts.
We are fortunate in having a loyal and long-established customer base on our
original product range that gives us significant recurring and repeat revenues.
We are now working with each of these customers to review and plan for an
upgrade to Sirius. In addition, we are confident that we have an underwriting
product with global application that is already taking us into new geographies
and into a league of larger insurance companies.
Our confidence stems from the paradigm shift in underwriting systems selection
that we are witnessing in our industry and the evidence that our software,
possibly uniquely at this time, is capable of responding to that shift.
Insurance companies are no longer willing to embark upon massive systems
development projects that take years to bring to fruition, demand a seven figure
budget to implement with high ongoing maintenance costs, and take an extended
period to deliver an often limited return on investment. Insurers are now
demanding more, sooner and for less than ever before. They want greater value
for money and the commercial agility that speed to market gives them, but
without sacrificing functionality.
For many software vendors, that paradigm shift poses a problem. This is not the
case for Sirius for Underwriting which was designed to deliver rich
functionality at a fraction of the cost of legacy systems. A Sirius for
Underwriting system offers rapid development with shorter time to market, a high
degree of user self-sufficiency resulting in a lower cost of ownership,
flexibility of deployment and proven system scalability. All this adds up to a
rapid return on investment.
SIRIUS FINANCIAL SYSTEMS, INC.
In the US, we undertook the significant investment that we had planned to build
a stronger operation capable of sustaining a high-profile business in this
market. We are now firmly established, with our operation supported by
additional technical and commercial resources. In line with our Group strategy,
we rebranded the business to trade as Sirius Financial Systems, Inc.
Not surprisingly, in the US we suffered more than in other parts of our business
from economic slowdown and the shock waves of September 11th. Decision-making
was slowed and buying cycles prolonged. Following our planned investment in the
US market we incurred a loss in H1 as previously reported. Although the level of
losses reduced in H2, and December achieved a profit, overall results for the
year were lower than anticipated, largely due to the unexpected impact of
September 11th.
We start 2002 with the continuing firm conviction that financial performance
will improve, and that the US represents an excellent market place for our
Sirius product range. Our underwriting and e-commerce products have been well
received and a strong prospect pipeline built. We believe that there are some
3,000 underwriters in our target market. Whilst we have an established user base
amongst the Managing General Agent sector, we believe that our greatest growth
in the US will come from the sale of Sirius applications to the largest brokers
and underwriters and that is where we will be focusing our marketing efforts.
To support our strategy of global marketing of Sirius for Underwriting from our
three principal operations, we have restructured our Caribbean office to operate
as a subsidiary of Sirius Financial Systems, Inc. This, in turn, now reports
into our Solutions division based in the UK which manages the sale and servicing
of underwriting product installations worldwide.
E-COMMERCE
We were correct in anticipating more prudent growth from this area of our
business. This past year, we have seen our larger customers concentrating more
on the replacement or extension of their back-office systems rather than the
creation of entirely new electronic channels to market. However, this
development has not been of disservice to us. Web-enablement is becoming an
integral part of all new systems development and we are strongly placed to
provide back-office infrastructure systems in addition to demonstrating
credentials in building transactional web sites.
Whilst the markets have clearly been disaffected with many of the pure dot.com
operations, some new players have quietly been making inroads into the online
market. One of the UK's most successful cybermediaries, its4me, is our customer.
It has distinguished itself recently by winning a number of e-commerce and
customer service awards. It is achieving exceptional growth, has made online
customer self-service a reality and, in its own words, it could not have done it
without our software.
PARTNERSHIPS AND AFFINITIES
We recognise that the ambitions we have for the company in terms of growth and
market share cannot be realised by our efforts alone. To make the number of
sales of Sirius for Underwriting worldwide that we are targeting, we need to
work through partners.
This year will see more emphasis on working with organisations such as systems
integrators and management consultants who have large insurance client bases
worldwide. In this way, we can concentrate more on being a product vendor. We
see a partner strategy as vital to achieving our ambitions to scale our business
and secure a strong share of the underwriting systems market worldwide.
During the year, we formed a partnership with CMG UK Limited, and are building
relationships with other systems integrators and management consultants in the
UK and elsewhere. Our longer-term partner, Microsoft, also recognises our
strength in general insurance software and has committed to support our global
ambitions.
SIRIUS FOR BROKING
In the UK, our flagship product is now firmly established as Sirius for Broking.
With more than 100 installed sites, we have doubled the position reached at the
end of 2000.
We believe that we sold more new broking product than any of our competitors
last year, possibly outselling their combined successes. In the process, we
displaced many competitor systems.
We continue to market to the UK's top 50 brokers who control very sizeable
businesses. Sirius has already proved its ability to support the mainstream
business and the special scheme business of large operations and is now
penetrating this segment of the market.
In terms of notable sales of Sirius for Broking in 2001, they included a
250-user system for Carole Nash, a specialist in motorbike insurance and classic
car cover, and a 50-user system for Birmingham's leading commercial lines
broker, Beddis Hobbs. A significant broking and underwriting system is also
being installed for Towergate Underwriting Group. We have recently secured
further large sales from Hall & Clarke, and a substantial general broker based
in South East London.
These important wins demonstrate the power of Sirius for Broking in the UK
market. Our strong prospect pipeline, when combined with a 700-strong Unix-based
customer base who are actively planning their upgrade to the new platform, gives
us visibility of a significant revenue stream for the next two to three years.
To support this, we are now recruiting more sales staff. Our goal is to achieve
market dominance of the segment of the UK broking market that we target.
In general terms, we can report that clarity has emerged in the UK broking
market over recent months. The distraction of a planned insurer initiative
ceased and the early claims of many of the new ASP operations failed to
materialise. A greater sense of reality now characterises the market, with
brokers seeking evidence of technology that is proven and in use and is
delivering measurable return on investment. Once again, we are well placed to
respond to these business requirements and to exploit the business opportunity
they represent.
SWIFT FOR IFAs
Our Swift software also came into its own last year. As planned, we launched a
new version of the product which combined front-office and back-office
functions. This has created much interest with the larger IFA community which is
our prime target market. With new specialist software for Self-Invested Personal
Pension management, we secured more business from pension providers.
Swift ended 2001 with a record sales month, including securing sales from
several larger players. We have a good prospect pipeline of IFA and pension
provider opportunities and are now achieving the run-rate sales growth from
upgrade and new business that we were aiming for. We are also very pleased to
have recently secured the largest order to date for Swift, from a major UK bank.
Our strategy for Swift is to become the software provider of choice for the UK's
medium to large IFAs who numerically represent a small percentage of the market
but who control the majority of business transacted.
INSURANCE DISTRIBUTION
This division performed well in 2001. Its MediQuote product achieved greater
market acceptance and now has 1,000 registered users performing more than 3,000
quotations a month against a range of 100 private medical and related insurance
products. In addition, partnership agreements were concluded with the UK's three
largest networks whose combined membership of 5,000 IFAs now has access to the
service. MediQuote remains the UK's only portal for private medical insurance
quotations and is well placed to meet the needs of the health insurance sector
to increase efficiency and reduce the cost of product distribution and
servicing.
At the close of the year, we concluded an agreement with Towergate Underwriting
Group. Under the terms of this agreement, we outsourced the management of our
MasterPlan schemes marketing company to The Folgate Partnership, a new company
created by Towergate management to develop and acquire broker distribution
channels within the UK. We have recently sold them our risks4u portal,
representing a good investment in this development, and securing a 10-year
revenue stream from this sale. Moving forward, we will continue to undertake all
systems work relating to MasterPlan, leaving The Folgate Partnership to deliver
MasterPlan members with a far wider insurance product range.
In the current year, the Insurance Distribution division is taking a critical
look at the quotation products from which a major part of its revenue is
derived. The quotation product market is changing rapidly and brokers are now
faced with a number of choices for obtaining rating and quotation data to use in
personal lines business. We will be looking at the technologies that we have
already deployed in addition to new hybrid services to meet the market's need
for more demand-led front-office services accessible across the internet. This
analysis will take into account the insurers' needs to distribute and
dynamically price personal lines products if they are to improve current cost
ratios.
MEDIAMAKER
For much of the year, the New Media part of this business experienced a slow
down in purchasing. This was in large measure compensated for by the success of
the Established Media operation which delivered a strong performance.
Business is already showing signs of starting to pick up. MEDIAmaker will aim to
continue organic growth in 2002. It will also look for new opportunities in the
outsourcing of communication infrastructures, strategic alliances with other
organisations and the exploitation of emerging markets in New Media.
The Established Media team entered the year with the goal of acquiring at least
one new major account. We are delighted that it recently met this goal by
securing the largest contract in its history for media services to a major
blue-chip client.
MEDIAmaker continues to take advantage of its relationship with Sirius. It
anticipates more profitable introductions from the insurance sector and the
possibility of further technical integration as Sirius' clients demand more of
the web technologies that are MEDIAmaker's core skill.
The company also believes that high market interest in e-learning represents a
good opportunity for its 'Learnerland' packaged system, and it is confident of
converting this interest to sales in 2002.
STRUCTURE AND RESOURCES
As planned, in 2001 we formalised the divisional structure of our business. In
this way, we increased accountability, visibility of financial performance and
alignment to market segments. We put greater focus within Human Resources upon
communication, knowledge sharing and training and our latest employee survey
indicated positive progress in these areas.
We also successfully rebranded the Company as Sirius Financial Solutions Plc to
coincide with our move to a full Stock Exchange listing. We feel that the new
brand will take us to the next phase in our development. Already, it has
injected new dynamism into the Group in addition to being well accepted and
achieving good recognition in its market.
STRATEGY AND OUTLOOK FOR 2002
The vision that we are building for 2002 has been scaled up significantly from
that of last year. All divisions will be working to ambitious targets in terms
of selling and delivering new systems. To meet these targets, we will be hiring
more staff in a range of roles. This move is in contrast to several of our
high-profile competitors and larger service providers who have failed to sell
older technologies and services and are now retrenching.
We have also set ourselves the goal of moving to new, larger, purpose-built
offices within 12 months. These will give us the ability to grow and to present
ourselves more professionally.
In 2002, we have our strongest order book ever and are forecasting high growth.
At this point in the year, we have committed professional services revenue which
is twice last year's total. We already have visibility of two-thirds of our 2002
target revenue. In line with many other companies in the IT Sector we have
reviewed our revenue recognition policy. The rigorous application of this policy
means that much of the significant business which we secured at the very end of
2001 will be attributed to 2002 revenue. We anticipate this making 2002 an
exceptional year.
LOOKING FORWARD
We are looking forward to a rewarding year in 2002. Our plans reflect the
investments we have made in our products over many years and our determination
to exploit the opportunities presented to us. We now have product maturity on
our side and can afford to be more focussed and selective. We are more confident
than ever in our ability to deliver superior software solutions worldwide.
We are driven by one primary goal - to achieve a greater share of the global
insurance technology market. We aim to gain a ten per cent. share of our target
underwriting market within the next five years and to have become the dominant
UK broking software provider within three years. We believe that we have the
people, product, partners and prospects to bring these plans to fruition.
Whilst the potential for strong organic growth is clearly visible, we feel
confident we will be able to consider acquisitions again once our share value is
fully appreciated by the investor community.
Stephen J Verrall
Group Chief Executive
9 April 2002
Group Profit and Loss Account
For the year ended 31 December 2001
Notes 2001 2000
------- £ £
------------- -----------
Turnover 2 17,373,850 17,135,457
Cost of sales (9,875,848) (9,603,456)
-------------- ------------
Gross profit 7,498,002 7,532,001
Distribution costs (2,601,612) (2,410,613)
-------------- ------------
Administrative expenses:
- goodwill amortisation (891,856) (854,442)
- depreciation (514,469) (437,868)
- other (3,726,861) (3,060,124)
-------------- ------------
- total administrative expenses (5,133,186) (4,352,434)
Operating profit before goodwill amortisation 655,060 1,623,396
Goodwill amortisation (891,856) (854,442)
-------------- ------------
Operating (loss)/profit (236,796) 768,954
Interest receivable 101,421 175,098
Interest payable (145,626) (216,837)
-------------- ------------
(Loss)/Profit on ordinary activities before taxation (281,001) 727,215
Tax on profit on ordinary activities (131,880) (8,123)
(Loss)/Profit on ordinary activities after taxation (412,881) 719,092
Equity dividends on ordinary shares 3 (407,124) (392,413)
-------------- ------------
Retained (loss)/profit for the financial year (820,005) 326,679
======== ========
(Loss)/Earnings per share: 4
- basic (2.6)p 4.6p
- diluted (2.6)p 4.4p
- adjusted 4.1p 10.4p
EBITDA 1,169,529 2,061,264
--------------- ------------
Group Statement of Total Recognised Gains and Losses
For the year ended 31 December 2001
2001 2000
£ £
------------ -----------
(Loss)/Profit for the financial year (412,881) 719,092
Exchange difference on retranslation of net assets of subsidiary (18,240) (30,098)
undertaking -------------- -----------
Total recognised gains and losses relating to the year (431,121) 688,994
======== =======
Reconciliation of Movements in Shareholders' Funds
For the year ended 31 December 2001
2001 2000
£ £
------------- ----------
Total recognised gains and losses (431,121) 688,994
Dividends (407,124) (392,413)
Shares issued net of expenses and amounts accrued 212,219 360
Shares to be issued - 950,000
------------- ----------
Total movements during the year (626,026) 1,246,941
Shareholders' funds at 1 January 12,128,691 10,881,750
-------------- -----------
Shareholders' funds at 31 December 11,502,665 12,128,691
======== ========
Group Balance Sheet
At 31 December 2001
Notes 2001 2000
------ £ £
------------ ----------
Fixed assets
Intangible assets 7,338,451 8,025,928
Tangible assets 1,521,737 1,784,978
------------- ------------
8,860,188 9,810,906
Current assets
Stocks 46,134 44,705
Debtors 7,234,410 6,444,820
Cash at bank and in hand 132,683 116,221
------------- -----------
7,413,227 6,605,746
Creditors: amounts falling due within one year (3,511,157) (3,042,450)
------------- -----------
Net current assets 3,902,070 3,563,296
------------- -----------
Total assets less current liabilities 12,762,258 13,374,202
-------------- -----------
Creditors: amounts falling due after more than one year (951,292) (624,887)
Provisions for liabilities and charges - (3,127)
Accruals and deferred income (308,301) (617,497)
-------------- -----------
11,502,665 12,128,691
======== ========
Capital and reserves
Called up share capital 163,117 159,094
Share capital to be issued 950,000 1,900,000
Share premium account 4,162,733 4,154,943
Merger reserve 5,069,308 3,918,902
Profit and loss account 1,157,507 1,995,752
-------------- ------------
11,502,665 12,128,691
======== ========
Shareholders'funds
Equity 11,500,550 12,126,576
Non-equity 2,115 2,115
-------------- ------------
11,502,665 12,128,691
======== =========
Group Statement of Cash Flows
For the year ended 31 December 2001
Notes 2001 2000
------ £ £
----------- ----------
Net cash inflow from operating activities 5 549,228 1,707,190
Returns on investments and servicing of finance
Interest received 101,421 175,098
Interest paid (116,366) (167,213)
Interest element of finance lease rental payments (26,195) (46,899)
Issue costs on long-term loans (6,375) -
------------ ----------
(47,515) (39,014)
======= =======
Taxation
Corporation tax paid - (459)
------------ ----------
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (318,973) (551,089)
Receipts from sales of tangible fixed assets 72,523 34,254
------------ ----------
(246,450) (516,835)
------------ ----------
Equity dividends paid (401,090) (313,888)
------------ -----------
Net cash (outflow)/inflow before financing (145,827) 836,994
Financing
Issue of ordinary share capital 7,840 6,321
Share issue costs - (5,961)
New long-term loans 750,000 -
Repayment of long-term loans (259,167) (296,716)
Repayment of capital element of finance leases and hire purchase (248,708) (280,011)
contracts
------------- -----------
249,965 (576,367)
------------- -----------
Increase in cash 104,138 260,627
======= =======
SIRIUS FINANCIAL SOLUTIONS PLC
NOTES TO THE ACCOUNTS AT 31 DECEMBER 2001
1. BASIS OF PREPARATION
The financial information set out above does not constitute the full statutory
accounts of Sirius Financial Solutions PLC for the years ended 31 December 2001
and 31 December 2000 respectively, but is derived from those accounts. Statutory
accounts for 2000 have been delivered to the Registrar of Companies, and those
for 2001 will be delivered following Sirius Financial Solution's Annual General
Meeting on 10 May 2002. The auditors have reported on those accounts; their
reports were unqualified and did not contain statements under section 237(2) or
(3) of the Companies Act 1985.
The results for the year ended 31 December 2001 set out in this document have
been prepared on a basis consistent with the accounting policies adopted by
Sirius Financial Solutions for the prior period, with the additional application
of Financial Reporting Standards 15 through 18 which have been adopted by the
Group where applicable.
2. TURNOVER AND SEGMENTAL ANALYSIS
The Group operates in one principal area of activity, that of the development
and supply of insurance specific application software both as a package and as a
solution. It operates within two geographical markets, the United Kingdom and
the North America.
North America Europe and Total
United Kingdom and Caribbean Rest of World
2001 2000 2001 2000 2001 2000 2001 2000
£ £ £ £ £ £ £ £
------------ ---------- ----------- ---------- ------------ ----------- ---------- ----------
Group turnover
Turnover by
destination:
Sales to 13,541,091 13,722,168 1,933,984 1,701,283 1,898,775 1,712,006 17,373,850 17,135,457
third parties
------------ ------------- ------------ ------------ ------------ ------------ ------------- -------------
Turnover by
origin:
Sales to 15,439,866 15,434,174 1,933,984 1,701,283 - - 17,373,850 17,135,457
third parties
------------- ------------- ------------ ------------ ------------- ------------- ------------- -------------
Profit
Segment operating
profit/(loss)
before
goodwill 1,564,197 1,763,278 (556,675) 102,141 - - 1,007,522 1,865,419
amortisation
======= ======= ======= ======= ======= =======
Central group costs (352,462) (242,023)
Goodwill (891,856) (854,442)
amortisation
Net interest
payable
and similar charges (44,205) (41,739)
----------- -----------
(Loss)/Profit on
ordinary
activities before (281,001) 727,215
taxation
======= =======
Net assets
Net assets/
(liabilities)
by segment 12,575,481 12,431,282 (1,072,816) (302,591) - - 11,502,665 12,128,691
======== ======== ======== ======= ======== ======== ======== ========
Of the goodwill amortisation £226,842 (2000 : £106,039) relates to North America
and the remainder relates to the United Kingdom.
3. DIVIDENDS AND OTHER APPROPRIATIONS
2001 2000
£ £
------------ ----------
Equity dividends on ordinary shares:
Final proposed 1.5p per share (2000 : 1.5p) 241,503 235,469
Interim paid 1p per share (2000 : 1p) 165,621 156,944
------------- -----------
407,124 392,413
======= ========
4. EARNINGS PER ORDINARY SHARE
The calculation of basic earnings per ordinary share is based on losses of
£412,881 (2000 : profit of £719,092) and on 16,035,175 (2000 : 15,667,654)
ordinary shares, being the weighted average number of ordinary shares in issue
during the year.
The loss attributable to ordinary shareholders and weighted average number of
ordinary shares for the purpose of calculating the diluted earnings per share
are identical to those used for the basic earnings per share. This is because
the exercise of share options would have the effect of reducing the loss per
ordinary share and is therefore not dilutive under the terms of FRS14.
The 2000 diluted earnings per share is based on the profit for the year of
£719,092, and on 16,160,234 ordinary shares, calculated as follows:
2000
No.
-----------
Basic weighted average number of shares 15,667,654
Dilutive potential ordinary shares:
Executive share options and employee SAYE schemes 204,701
Deferred consideration 287,879
------------
16,160,234
========
Adjusted earnings per share
The adjusted earnings per share is calculated from operating profit before
goodwill amortisation of £655,060 (2000 : £1,623,396) and on 16,035,175
(2000 : 15,667,654) ordinary shares of 1p each, being the weighted average
number in issue during the year.
The Directors have chosen to present this adjusted earnings per share as they
believe that it provides a more meaningful indicator of the performance of the
Group.
5. NOTES TO THE STATEMENT OF CASH FLOWS
(a) Reconciliation of operating (loss)/profit to net cash inflow from operating
activities
2001 2000
£ £
------------ ----------
Operating (loss)/profit (236,796) 768,954
Depreciation of tangible fixed assets 514,469 437,868
Amortisation of goodwill 891,856 854,442
(Profit)/Loss on sale of fixed assets (4,451) 4,393
Decrease in deferred payment debtor 464,937 200,453
(Increase)/Decrease in other debtors (1,254,527) 204,379
Increase in stocks (1,429) (7,337)
Increase/(Decrease) in creditors 175,169 (755,962)
------------ ----------
Net cash inflow from operating activities 549,228 1,707,190
======= =======
(b) Analysis of net debt
At Cash At
1 January flow Other 31 December
2001 £ £ 2001
£ £
----------- ----------- ---------- -------------
Cash at bank and in hand 116,221 16,462 - 132,683
Bank overdrafts (87,676) 87,676 - -
----------- ----------- ----------- -------------
28,545 104,138 - 132,683
----------- ----------- ----------- -------------
Bank loans (623,956) (490,833) 3,310 (1,111,479)
Finance leases (473,839) 248,708 - (225,131)
----------- ----------- ----------- -------------
(1,069,250) (137,987) 3,310 (1,203,927)
======== ======== ======== ========
(c) Reconciliation of net cash flow to movement in net debt
2001 2000
£ £
------------ ----------
Increase in cash in the year 104,138 260,627
Cash (inflow)/outflow from movement in debt and lease financing (242,125) 576,727
------------ -----------
Change in net debt arising from cash flows (137,987) 837,354
Other non-cash movements 3,310 (97,301)
------------- -----------
Movement in net debt in the year (134,677) 740,053
Net debt at 1 January (1,069,250) (1,809,303)
-------------- -----------
Net debt at 31 December (1,203,927) (1,069,250)
======== ========
(d) Non-cash transactions
During the year the Company issued shares to the vendors of acquired businesses
with a fair value on issue of £1,154,379.
This information is provided by RNS
The company news service from the London Stock Exchange
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